Hagens Berman: Consumers Sue G.M. over Recall

SEATTLE – Hagens Berman, a consumer-rights law firm that recently settled the $1.6 billion case against Toyota, today announced it has filed a class-action lawsuit seeking statutory penalties and punitive damages against automaker General Motors (NYSE:GM) on behalf of owners of 1.4 million vehicles affected by a safety defect. 

The safety defect at issue has been linked to 12 fatalities and more than 300 crashes. Hagens Berman continues its investigation into whether this defect exists in other models not yet recalled.

The suit seeks to recover from G.M. minimum statutory damages of $250 for each owner, which alone totals more than $350 million and could go higher, along with punitive damage for the willful nondisclosure of critical safety information.

The safety defect involves the car’s ignition, which according to consumers, can switch off while in operation, disabling airbags and other electrical features such as power steering and power brakes.

The 42-page complaint, filed March 19, 2014 in the U.S. District Court of California, Central District states that G.M. failed to alert consumers of the known risks they faced driving the vehicles, despite promising it would honor the federal reporting requirement of safety risks for all General Motors cars including assets purchased from the 2009 bankruptcy. 

“The highest duty for a car manufacturer is to act in the best interests of its customers when it comes to safety,” said Steve Berman, managing partner of Hagens Berman and the lead counsel of the recently settled Toyota litigation. “G.M.’s inaction – sitting mute while people died – rises to the level of criminal in my book. While civil in nature, we believe it is a step toward holding G.M. accountable for its inaction.”

The firm seeks to represent all individuals who owned or leased a G.M. vehicle affected by the recall including 2005-7 Chevrolet Cobalts and 2007 Pontiac G5 models, and last month extended the recall to include 2003-7 Saturn Ions, 2006-7 Chevrolet HHRs, 2006-7 Pontiac Solstice and 2007 Saturn Sky models.

According to published reports and government documents, G.M. had knowledge of the serious defect as early as 2001, but critics charge that the company ignored warnings of the defect’s severity and did not warn consumers.

The complaint states that under the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act and its accompanying regulations, the manufacturer must promptly inform the Secretary of Transportation when it learns that a vehicle contains a defect and that defect is related to motor vehicle safety. Hagens Berman intends to prove that G.M. violated the TREAD Act and the Michigan Consumer Protection Act, and committed fraudulent concealment by failing to disclose the deadly ignition switch defects to the federal government and consumers.

Berman was appointed co-lead counsel representing Toyota owners, and in 2013 negotiated a $1.6 billion settlement on behalf of consumers who owned or leased Toyota vehicles implicated in a rash of cases of unintended acceleration.

Reports published in 2005 state that G.M. issued a service bulletin for some G.M. vehicles, telling dealers to warn drivers to remove “unnecessary items from their key chains,” a warning that was extended a year later to a broader range of G.M. vehicles. Reports also state that G.M. said that it corrected the problem in new cars starting in 2007.

“Asking consumers to lighten their key chains to solve this widespread, potentially fatal safety defect is akin to asking them to wear a helmet because the seatbelts aren’t working right.  The proper course would be to alert them to the problem and then fix the broken part,” added Rob Carey, a partner in Hagens Berman’s Phoenix office.

The suit seeks to award affected consumers the greater of actual or statutory damages under consumer-protection laws, along with other damages for owners of vehicles with ignition switch safety defects, and punitive damages.

Concerned consumers who have owned or leased any of the affected G.M. models during the affected period are encouraged to contact a Hagens Berman attorney by emailing GeneralMotors@HBSSlaw.com or calling 206-623-7292. Additional information about the investigation is available at www.hbsslaw.com/GM.